On October 30, I was invited to participate in a Cato Institute panel discussion on Halbig, King, and related challenges to the Affordable Care Act. In the wake of the conference, I’ll be writing a few posts based on the panel discussion. If you’d like to watch the entire law-focused panel, I’ve created a C-SPAN clip here. Other reflections at Part I (Isolationism), Part II (Textualism), Part III (The Whole-Text Canon), Part IV (Halbig’s “Two Exchanges” Problem), and Part V (Creeping Constitutionalism).
In response to Halbig, many of the government’s defenders turned to arguments based on purpose to criticize the D.C. Circuit’s opinion. If the entire purpose of the ACA is to ensure that people get affordable healthcare, then how could a court possibly interpret the law in a manner that makes so many people ineligible for affordable healthcare?
I have been critical of these sorts of generalized purposivist arguments for a couple of reasons. First, statutory interpretation should start with the text of the statute, not an appeal to general purpose. Sure, perhaps eventually, as a double check or in close cases, one must resort to general purpose to resolve ambiguity. But before we get there we need to wrestle with the text.
Second, the challengers have an answer to the government’s generalized “purpose” argument: Sure, the general goal was to provide everyone with insurance. But Congress doesn’t blindly pursue its goals at all costs. There are compromises, incentives, and other limitations that come into play.
The challengers argue that with the ACA, Congress wanted the states to take the laboring oar in creating exchanges. But because of constitutional limits on commandeering state governments, Congress had to induce (or attempt to induce) states to set up exchanges through an incentive system: set up an exchange or your citizens won’t get any tax subsidies.
On the challengers’ view, this incentive system would work just like Medicaid. Congress bribes (but doesn’t impermissibly compel!) the states to participate in Medicaid; if they refuse, then Congress withholds funds—lots of funds. However, the challengers contend that Congress miscalculated in the ACA. Congress thought every state would jump at the change to get all of that federal subsidy money. And therefore Congress thought their plan would work: every citizen in every state would get tax subsidies and affordable insurance on a state exchange. When that supposed miscalculation came to fruition, the challengers argue that it was not the courts’ job to rewrite the statute to correct Congress’s “mistake.”
But the challengers have a big textual obstacle standing in their way: the statute’s provision for federal exchanges in section 1321.